People make travel choices both online and offline, as compared to a pure online service provider like Yahoo, which has no direct offline equivalent. This allows us to compare online satisfaction and loyalty with offline satisfaction and loyalty for the same service.
We develop hypotheses about the effects of constructs focal to our research, namely, the direct effect of the online medium on service encounter satisfaction, overall satisfaction, and loyalty. We also develop hypotheses about the relationship between satisfaction and loyalty and the differential effects of various factors such as ease of obtaining information and frequency of use, online relative to offline. In developing the hypotheses, we primarily draw upon behavioral decision theory that examines tradeoffs between cognitive effort deployed and the quality or accuracy of the decisions (choices) that consumers make (Johnson & Payne, 1985; Johnson, Bellman, & Lohse, 2002). We also predict the effects of control variables such as website factors, service attributes, and prior experience with the service, on satisfaction and loyalty.
Fig. 1 summarizes the conceptual model of how the online medium influences customer satisfaction and loyalty. The figure includes the focal constructs as well as control variables. Our main thesis is that satisfaction, loyalty and their relationship differ online from offline because the same customers could make different choices online versus offline in the same decision situation. We now describe each of the constructs used in the study.
3. Managerial implications
Based on our study, we recommend the following strategies and tactics for service providers.
（1）Use the online medium to reinforce loyalty
Satisfaction builds loyalty, which reinforces satisfaction, a phenomenon which is stronger online than offline. Service marketers should consider developing special loyalty-enhancing initiatives for their online customers to reinforce overall satisfaction.15 For example, a hotel offering rewards based on number of hotel stays could (1) provide additional reward points for booking online, (2) prominently feature these rewards at its website, (3) enable customers to keep track of their reward positions, and (4) proactively remind or encourage customers to act when they get close to their reward milestones. While some companies have implemented the first three initiatives, not many are doing the fourth initiative.
(2)Enhance the information content of the website
Our results show that the depth of information at the website increases service encounter satisfaction, which increases overall satisfaction, which, in turn, has a mutually